Rohan Hafas, Managing Director of Stakeholder Management and Communications at Danantara, has highlighted how the persistent practice of underpricing and under-invoicing in natural resource exports has caused significant financial losses for the state for years, despite often falling outside the strict legal definition of corruption.
Under-invoicing is a deceptive trade practice where exporters intentionally declare the value of goods on an invoice at a price lower than the actual transaction value. This maneuver is frequently employed to bypass tax obligations and manipulate financial reporting.
To combat this, the government has established a specialized state-owned enterprise (SOE), PT Danantara Sumberdaya Indonesia (PT DSI). According to Hafas, these losses are primarily driven by collusive price manipulation occurring between private sector sellers and buyers, which bypasses regulatory oversight.
“Since these transactions involve private parties on both sides, it technically falls outside the scope of traditional corruption. Instead, it is a game of price manipulation and the offshore parking of funds,” Hafas explained during a press conference in South Jakarta on Wednesday (May 20).
He noted that the government has attempted to address these issues repeatedly, citing various legal cases related to these practices dating back to 2010. By setting export prices significantly below international market rates, exporters capture larger margins, which severely undermines the country’s tax revenue and export earnings potential.
Furthermore, Hafas raised concerns about the practice of parking export proceeds in foreign bank accounts. This prevents capital from circulating within the domestic economy, thereby hindering national investment and growth. “If the money is parked abroad, that must stop. These funds are meant to fuel our growth and investment. When capital does not return to the country, it creates a lack of liquidity and limits our development,” he added.
The establishment of PT DSI is a strategic move aimed at reforming the governance of natural resource exports and ensuring that export proceeds are repatriated to Indonesia. Moving forward, the agency will act as a watchdog, overseeing the fair pricing of strategic commodity exports—such as palm oil and coal—to ensure they align with global market standards and to effectively deter underpricing practices.
See also:
- Danantara Confident That SOE-Led Export Mechanism Will Not Disrupt Market Dynamics
- Why Has Danantara Not Yet Submitted Its 2025 Financial Report?
- Danantara Sumberdaya Indonesia Officially Formed: Streamlining Mineral Export Supervision?
Summary
Danantara has identified significant state financial losses resulting from the persistent under-invoicing and underpricing of natural resource exports. By intentionally declaring lower transaction values, private exporters have bypassed tax obligations and manipulated financial reporting, often operating in a gray area that skirts traditional legal definitions of corruption. Furthermore, the practice of parking export proceeds in foreign bank accounts has hindered national economic growth by limiting domestic liquidity and investment.
To combat these illicit practices, the government has established PT Danantara Sumberdaya Indonesia (PT DSI) to serve as a specialized regulatory watchdog. This agency aims to reform commodity export governance by ensuring that prices for goods like coal and palm oil align with global market standards. By overseeing these transactions, PT DSI intends to maximize state tax revenue and ensure that export proceeds are repatriated to support Indonesia’s development.
